This book analyzes Chinese nationalism from the perspective of social economics. It posits a conceptual framework in which national status is treated as a "luxury" while material consumption is considered as a "necessity" in people's preferences, which implies that popular nationalism tends to increase with economic development. The book extensively uses the tools of game theory and behavioral economics to analyze inter-ethnical and international conflicts in historical and contemporary China.

The author's economic approach to the subject of nationalism brings fresh and critical insights into the Chinese historical events and relations with foreign countries. For example, it helps resolve the following puzzles: Why did most Chinese support an ethnic minority, the Manchus, to be their ruler after the collapse of the Ming dynasty? In the Boxer Rebellion, why did the Qing dynasty declare war against more than eight foreign powers when it knew well that any of the countries could defeat China easily? What are the fundamental causes of the 1962 Sino-Indian War and the 1979 Sino-Vietnamese War? Who is responsible for the bombing of the Chinese Embassy in Belgrade?

This book attempts to answer the questions based on the theories of social economics and rational choice, which will interest those researching on nationalism, China studies, international relations, history and political economy.